Certified Internal Auditor Professional Standards & Competencies 3 — Questions and Answers
Question 1: The IIA's International Professional Practices Framework (IPPF) categorizes its guidance into mandatory and recommended. Which element is MANDATORY?
- Practice Advisories
- Implementation Guides
- The Code of Ethics and Standards (Correct answer)
- Supplemental Guidance
Correct answer: The Code of Ethics and Standards
The Core (Code of Ethics and International Standards for the Professional Practice of Internal Auditing) constitutes the only mandatory guidance in the IPPF.
Question 2: An internal auditor who lacks expertise in a specialized area needed for an engagement should:
- Decline to perform the engagement entirely
- Obtain competency through training, use a specialist, or outsource that portion (Correct answer)
- Rely solely on management's representations in that area
- Expand the engagement scope to compensate for the knowledge gap
Correct answer: Obtain competency through training, use a specialist, or outsource that portion
Standard 1210 allows auditors to address competency gaps by seeking appropriate training, engaging a qualified internal or external specialist, or outsourcing the work.
Question 3: When the CAE concludes that the internal audit function has conformed with the IIA Standards after completing a QAIP, this conformance may be communicated to stakeholders as:
- Meets all regulatory requirements for internal auditing
- Conforms with the International Standards for the Professional Practice of Internal Auditing (Correct answer)
- Certified by the IIA as a quality audit function
- Approved by the external auditors as independent
Correct answer: Conforms with the International Standards for the Professional Practice of Internal Auditing
Standard 1322 permits the CAE to state that the internal audit function 'conforms with the International Standards for the Professional Practice of Internal Auditing' only when supported by QAIP results.
Question 4: Which scenario represents a threat to an internal auditor's OBJECTIVITY rather than organizational independence?
- The CAE reporting administratively to the CFO
- An auditor having recently transferred from the accounts payable department being audited (Correct answer)
- Management setting the internal audit budget without board oversight
- The audit committee failing to approve the audit charter
Correct answer: An auditor having recently transferred from the accounts payable department being audited
An auditor who recently worked in the area being audited faces an objectivity (individual bias) threat, while reporting structures and governance gaps affect organizational independence.
Question 5: The IIA's Code of Ethics applies to which individuals?
- Only Certified Internal Auditors (CIAs) who hold an active certification
- All individuals and entities that provide internal audit services, including IIA members and CIA candidates (Correct answer)
- Employees of organizations that have adopted the IIA Standards
- External auditors who perform co-sourced internal audit work
Correct answer: All individuals and entities that provide internal audit services, including IIA members and CIA candidates
The Code of Ethics applies to IIA members, individuals holding IIA certifications, and those applying for certifications—essentially all who provide internal audit services under the IIA umbrella.
Question 6: Standard 1230 (Continuing Professional Development) requires internal auditors to enhance their knowledge and skills through:
- Obtaining at least one additional professional certification per five-year period
- Continuing professional education (CPE) sufficient to maintain proficiency (Correct answer)
- Annual participation in IIA-sponsored training programs only
- Completing 40 hours of ethics training per calendar year
Correct answer: Continuing professional education (CPE) sufficient to maintain proficiency
Standard 1230 requires auditors to maintain proficiency through ongoing continuing professional education, without specifying a required source or exact CPE hours.
Question 7: In the context of CIA exam competencies, 'governance' in internal auditing refers to:
- The IT general controls over financial reporting systems
- The combination of processes and structures to direct, manage, and oversee organizational activities (Correct answer)
- External regulatory requirements imposed on publicly traded companies
- The audit committee's approval of the internal audit budget
Correct answer: The combination of processes and structures to direct, manage, and oversee organizational activities
Governance encompasses the processes and structures used by an organization's board and management to direct, oversee, and ensure accountability for the organization's activities.
Certified Internal Auditor Professional Standards & Competencies 3
The IIA's International Professional Practices Framework (IPPF) categorizes its guidance into mandatory and recommended.
Which element is MANDATORY?